Invoicing is one of the most important yet often most overlooked development areas in small and medium-sized businesses. While the accounts payable department has always been vital to ensure that incoming and outgoing invoices are handled smoothly and accurately, there is much more that can be done by the forward-thinking executive. The age of big data has created opportunities throughout the business world, and AP departments are no exception - provided they are given the right mandate and the appropriate resources to leverage their wealth of data.
So how can the savvy executive manager begin improving the invoicing process and the AP department as a whole?
Start with a clear picture.
It's impossible to start making improvements without knowing exactly how things are done at the moment. While that may sound obvious at first, the realities of an AP department are generally far more complex than it seems from the outside.
On average, a single invoice requires input from 15 people and takes upwards of a full week to process, largely because nearly two thirds of all invoicing is still done on paper. Hopefully, your AP department is moving more smoothly, but it's important to know every detail, from how your VAT is being reclaimed to whether or not you regularly make payments a bit late.
Many executives also don't appreciate the full cost of processing invoices, which averages out at £9 according to recent data from Ardent Partners. This can quickly mount up over the course of a year, but there are ways to mitigate these costs.
Examine your workflow.
In order to ensure that your AP department is running as efficiently as possible, take a look at the tools and workflows in regular usage. If your AP department is still doing everything with spreadsheets - or even worse, on paper by hand - it's definitely time to start looking at what the modern world can do for you.
Handling everything electronically in a centralised digital location allows multiple team members to work with the same real-time data from multiple locations, and by combining this with modern optical character recognition software, it's easy to process invoices much faster than can be done by hand. This also dramatically decreases the likelihood of human error, which is one of the leading (and totally unnecessary) causes of inefficiency.
Automate, automate, automate.
This leads us to the final point for part one: whenever possible, automate your processes. Removing the human factor from the processing equation improves speed, reduces or eliminates errors and can free your AP team to dedicate themselves to analysing data and providing strategically valuable information to decision-makers.
Of course, if you'd rather not completely revamp your entire invoicing process, it might simply be easier to outsource the process to a dedicated invoice processing team which can provide your AP department with data that is guaranteed accurate. If you would like further information on this then contact us to discuss your requirements.
So how can the savvy executive manager begin improving the invoicing process and the AP department as a whole?
Start with a clear picture.
It's impossible to start making improvements without knowing exactly how things are done at the moment. While that may sound obvious at first, the realities of an AP department are generally far more complex than it seems from the outside.
On average, a single invoice requires input from 15 people and takes upwards of a full week to process, largely because nearly two thirds of all invoicing is still done on paper. Hopefully, your AP department is moving more smoothly, but it's important to know every detail, from how your VAT is being reclaimed to whether or not you regularly make payments a bit late.
Many executives also don't appreciate the full cost of processing invoices, which averages out at £9 according to recent data from Ardent Partners. This can quickly mount up over the course of a year, but there are ways to mitigate these costs.
Examine your workflow.
In order to ensure that your AP department is running as efficiently as possible, take a look at the tools and workflows in regular usage. If your AP department is still doing everything with spreadsheets - or even worse, on paper by hand - it's definitely time to start looking at what the modern world can do for you.
Handling everything electronically in a centralised digital location allows multiple team members to work with the same real-time data from multiple locations, and by combining this with modern optical character recognition software, it's easy to process invoices much faster than can be done by hand. This also dramatically decreases the likelihood of human error, which is one of the leading (and totally unnecessary) causes of inefficiency.
Automate, automate, automate.
This leads us to the final point for part one: whenever possible, automate your processes. Removing the human factor from the processing equation improves speed, reduces or eliminates errors and can free your AP team to dedicate themselves to analysing data and providing strategically valuable information to decision-makers.
Of course, if you'd rather not completely revamp your entire invoicing process, it might simply be easier to outsource the process to a dedicated invoice processing team which can provide your AP department with data that is guaranteed accurate. If you would like further information on this then contact us to discuss your requirements.
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